A bill that would create a pilot program for allowing advertising on government agency websites has been withdrawn after concerns about privacy and conflict of interest were raised.

Two New Jersey state senators sponsored a bill that could generate income for the state, but a few problems have caused the bill to be put on hold. SB 1531 would allow several state agencies — the New Jersey Economic Development Authority, NJ Transit and the New Jersey Lottery — to begin a two-year pilot program in which advertising could be sold on their websites. The bill was to create strict guidelines for regulating the advertisements, but the bill was withdrawn because of several potential problems.

While .gov websites prohibit advertisements, the three agencies targeted by SB 1531 use .com or .net domains, which could allow advertisements with the right legislation. And while the bill stipulates that the state will develop guidelines “that ensure that the subject matter of any Internet advertisement displayed by the agency directly relates to the business mission and purpose of the agency,” several conflicts remain.

Government websites are generally expected to be unbiased and the presence of advertisements could suggest that the government supports the product or service being shown. The state must also address privacy issues, as many advertisements use cookies to track users. Furthermore, it's possible for a third-party advertiser to forward users to websites with questionable content that could reflect poorly on the state.

Allowing businesses to showcase their names on sports stadiums and entertainment centers has become commonplace, and several states are looking for other options, such as website advertising, to make additional income. New York is extending the practice to allow subway stations to be named after businesses.